Inflation Drops to Four-Month Low

Retail inflation decreased to 5.22% in December from 5.48% in November, primarily due to lower food prices. The National Statistics Office reported that food basket inflation dropped to 8.39% in December. Despite the current decline, the Reserve Bank of India anticipates inflation might rise in the future.

Retail inflation has eased to its lowest in four months, dropping to 5.22% in December from 5.48% the previous month, according to data released by the government on Monday. This decline is largely attributed to a reduction in food basket prices.

Data from the National Statistics Office (NSO) indicates that food basket inflation fell to 8.39% last month, down from November's 9.04%. These figures reflect a notable decline from December 2023's 9.53% rate, marking the lowest monthly food inflation rate in four months, as confirmed by the NSO.

Despite this reprieve, the Reserve Bank of India has raised its inflation forecast for the current fiscal year to 4.8% from 4.5%, highlighting concerns over persistent food price pressures that might sustain higher inflation levels later this year.

(With inputs from agencies.)